NJ CAR President Laura Perrotta testified in front of the Assembly Budget Committee earlier today. She focused her comments on Governor Murphy’s proposal to eliminate the trade credit on new car sales and how it will impact New Jersey consumers by making vehicles more unaffordable for many buyers.
Background on the Trade-In Tax Credit
As all of you know, new and used car buyers in New Jersey don’t pay sales tax on the full value of their new vehicle, if they have a trade-in. Instead, they get a sales tax credit that recognizes the value of their trade. For instance, if a person buys a new car for $45,000 and trades in a vehicle valued at $15,000, they pay the 6.625% sales tax on $30,000. If the Governor eliminates the trade-in credit, consumers would pay sales tax on the full $45,000 (an additional $1,000).
NJ CAR encouraged members of the Budget Committee to reject the trade-in tax credit proposal that would harm New Jersey consumers, as well as vehicle sales in the Garden State.